Shulou(Shulou.com)11/24 Report--

On the morning of June 1, Beijing time, Salesforce, the world's largest provider of CRM software services, today announced its financial results for the first quarter of fiscal year 2024. According to the report, Salesforce's total revenue in the first quarter was $8.247 billion, up 11% from $7.411 billion in the same period last year, and 13% year-on-year, excluding exchange rate changes; net profit was $199 million, up 611% from $28 million in the same period last year; diluted earnings per share were $0.20, compared with $0.03 per diluted share in the same period last year.

Salesforce's first-quarter revenue and adjusted earnings per share exceeded Wall Street analysts' expectations, as did the outlook for revenue and adjusted earnings per share for the second quarter of fiscal 2024. But at the same time, Salesforce's revenue growth in the first quarter was the slowest year-on-year in 13 years. Salesforce shares fell more than 5 per cent in after-hours trading after the results.

Main results: for the quarter ended April 30, 2023, Salesforce's net profit was $199 million, up 611% from $28 million in the same period last year; diluted earnings per share were $0.20, compared with $0.03 per share in the same period last year.

Excluding certain one-time items (not in accordance with GAAP), Salesforce's adjusted net income for the first quarter was $1.674 billion, compared with adjusted net income of $982 million for the same period last year; adjusted diluted earnings per share were $1.69, compared with adjusted diluted earnings per share of $0.98 for the same period last year, a sharp increase from a year earlier, which beat analysts' expectations. On average, 36 analysts expected Salesforce's adjusted earnings per share to reach $1.61 in the first quarter, according to data provided by Yahoo Finance.

Salesforce's total revenue for the first quarter was $8.247 billion, up 11% from $7.411 billion in the same period last year, and 13% year-on-year, excluding currency changes, which also beat analysts' expectations. On average, 36 analysts had expected Salesforce's first-quarter revenue to reach $8.18 billion, according to Yahoo Finance.

Salesforce's subscription and support business generated $7.642 billion in revenue in the first quarter, compared with $6.856 billion in the same period last year, and accounted for 93 per cent of total revenue, compared with 93 per cent in the same period last year. Revenue from Salesforce's professional services and other businesses was $605 million in the first quarter, compared with $555 million in the same period last year; it accounted for 7 per cent of total revenue, compared with 7 per cent in the same period last year.

By region, Salesforce's first-quarter revenue in the Americas was $5.482 billion, compared with $4.971 billion in the same period last year; revenue in Europe was $1.951 billion, compared to $1.738 billion in the same period last year; and revenue in Asia-Pacific was $814 million, compared with $702 million in the same period last year.

Salesforce's total revenue cost in the first quarter was $2.125 billion, compared with $2.045 billion in the same period last year; it accounted for 26% of total revenue, compared with 28% in the same period last year. Of this total, the revenue cost of the subscription and support business was $1.51 billion, accounting for 18 per cent of the total revenue, compared with $1.44 billion in the same period last year, accounting for 20 per cent of the total revenue; the revenue cost of professional services and other businesses was $615 million, accounting for 8 per cent of total revenue, compared with $605 million in the same period last year.

Salesforce's total operating expenses were $5.71 billion in the first quarter, compared with $5.346 billion in the same period last year, and accounted for 74 per cent of total revenue, compared with 72 per cent in the same period last year. Of this total, R & D expenditure was $1.207 billion, accounting for 15% of total revenue, compared with $1.318 billion in the same period last year, accounting for 18% of total revenue; marketing and sales expenditure was $3.156 billion, accounting for 38% of total revenue, compared with $3.372 billion in the same period last year, accounting for 45% of total revenue General and administrative expenses were $6.38, accounting for 8 per cent of total revenue, compared with $656 million in the same period last year, accounting for 9 per cent of total revenue; restructuring expenditure was $711 million, accounting for 8 per cent of total revenue, compared with no such expenditure in the same period last year.

Salesforce's first-quarter operating profit was $412 million, compared with $20 million in the same period last year; it accounted for 5 per cent of total revenue, or operating margin, compared with 0.3 per cent in the same period last year. Excluding certain one-time items (not in accordance with GAAP), Salesforce's adjusted operating profit in the first quarter was $2.274 billion, compared with $1.308 billion in the same period last year; its share of total revenue, or adjusted operating margin, was 27.6 per cent, compared with 17.6 per cent in the same period last year.

Salesforce's cash from business operations in the first quarter was $4.49 billion, an increase of 22% compared to the same period last year. Salesforce's free cash flow in the first quarter was $425 million, an increase of 21% compared with the same period last year. During the quarter, restructuring expenses had a negative impact on operating cash flow growth by 910 basis points.

Total cash and cash equivalents held by Salesforce at the end of the first quarter were $9.155 billion, compared with $6.859 billion at the end of the first quarter of fiscal 2023.

At the end of the first quarter, Salesforce's remaining performance obligations were approximately $46.7 billion, an increase of 11% compared to the same period last year. At the end of the first quarter, Salesforce's current remaining compliance obligations were about $24.1 billion, an increase of 12% compared with the same period last year, and 12% year-on-year growth excluding currency changes.

Performance outlook: performance outlook for the second quarter of fiscal year 2024

Salesforce expects revenue of between $8.51 billion and $8.53 billion in the second quarter of fiscal 2024, up about 10% from a year earlier, a performance outlook that exceeds analysts' expectations; earnings per share are expected to be between $0.79 and $0.80; earnings per share that are not in accordance with general accounting standards are expected to be between $1.89 and $1.90, which also beat analysts' expectations. According to Yahoo Finance, 35 analysts had expected Salesforce's second-quarter revenue to reach $8.49 billion, while 37 analysts had expected Salesforce to earn $1.70 per share in the second quarter.

In addition, Salesforce expects the company's remaining performance obligations to grow by 10 per cent year-on-year in the second quarter of fiscal 2024.

Performance outlook for fiscal year 2024

Salesforce expects revenue of between $34.5 billion and $34.7 billion in fiscal 2024, up about 10% from a year earlier, with an average outlook of $34.6 billion, slightly below analysts' expectations; earnings per share are expected to be between $2.67 and $2.69; earnings per share without GAAP are expected to be between $7.41 and $7.43, exceeding analysts' expectations. According to Yahoo Finance, 47 analysts had expected Salesforce's annual revenue to reach $34.65 billion on average, while 45 analysts had expected Salesforce to earn $7.14 per share for the year.

In addition, Salesforce expects the company's operating cash flow to grow by between 16% and 17% year-on-year in fiscal 2024, with an operating margin of 11.4% and an adjusted operating margin of 28.0%, which is not in accordance with GAAP.

Share price movements: Salesforce shares rose $4.51, or 2.06%, to close at $223.38 in regular trading on the New York Stock Exchange. Salesforce shares fell 5.41 per cent, or $12.08, to $211.30 in after-hours trading as of 06:41 est (06:41 Beijing time, June 1). In the past 52 weeks, the highest price for Salesforce is $225.00 and the lowest price is $126.34.

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